EURO Ressources S.A.
TSX : EUR
PARIS : EUR

EURO Ressources S.A.

August 10, 2005 13:22 ET

EURO Ressources S.A. Announces Profitable Second Quarter Results

PARIS--(CCNMatthews - Aug 10, 2005) -

EURO Ressources S.A. (TSX:EUR) (Euronext of the Bourse de Paris:EUR) today announced its unaudited interim financial results for the second quarter of the 2005 financial year ended June 30, 2005, prepared in accordance with Canadian GAAP. These results record a second quarter net income of $197,000 compared to net income in the first quarter of $239,000. All financial amounts are expressed in U.S. dollars unless otherwise indicated.

James H. Dunnett, Directeur-General of EURO Ressources S.A. ("EURO" or "the Company"), commented: "We are pleased to report a second consecutive profitable quarter, reflecting the benefits of the acquisition of the Rosebel royalty and the financial restructuring undertaken during the last financial year.

"The continued increase in production at Rosebel, combined with maintained gold prices for the quarter, has allowed EURO to begin to build a financial reserve after many years of operating with limited discretionary resources. This is a most satisfactory outcome as we continue to build a stable base for the Company to execute its business plan and grow by acquisition of additional royalty and mineral interests."

Rosebel Royalty

As reported by Cambior Inc., production from the Rosebel gold mine for the half year ended June 30, 2005, was 175,567 ounces of gold. Although Cambior maintains its publicly stated forecast of 320,000 ounces of gold production from Rosebel during calendar 2005, gold production in the second calendar quarter increased to 89,614 ounces compared to 85,593 ounces in the first quarter. Cambior recently announced a further increase in gold reserves to in excess of 2.5MM ounces at Rosebel, which augurs well for continued strong levels of production at the mine.

More detailed information about the anticipated production levels and reserve statements related to the Rosebel gold mine is available on Cambior's website which can be viewed at: www.cambior.com.

A summary of the results for the Second Quarter to June 30, 2005, together with Management's Discussion and Analysis ("MD&A") dated August 9, 2005, is given below:

Second Quarter

Revenue for the three months ended June 30, 2005, of $1.085 million (2004: $22,000) consisted substantially of income from the Rosebel royalty, payable to the Company on production from the Rosebel Gold Mine. During the three months ended June 30, 2005, the Company recorded net income of $197,000 or 0.44 cents per share compared to a net loss of $(683,000) or 1.52 cents per share during the three months ended June 30, 2004. No tax has been provided against this profit as the Company has substantial operating tax losses currently available to be carried forward indefinitely against current and future taxable income.

General and administrative costs were $187,000 during the three months ended June 30, 2005, compared to $439,000 during the same period last year. This decrease in general and administrative costs reflects the reorganisation completed in Q3 2004 which also reduced interest costs to $88,000 during the three months ended June 30, 2005, compared to $258,000 during the comparative period in 2004. The increase in depreciation and amortisation expenses of $349,000 (2004: $4,000) during the three months ended June 30, 2005, records the amortization of the acquisition costs of the Rosebel Royalty in 2005. The charge of $222,000 for debt accretion relates to the accounting treatment for the deferred component of the Rosebel Royalty purchase consideration.

Six Months Ended June 30, 2005

During the six months ended June 30, 2005, the Company recorded net income of $0.436 million, or 1.0 cents per share, compared to a net loss of $1.4 million, or 3.1 cents per share, during the same period last year. The improvement in profitability was primarily attributable to income from the Rosebel royalty and a reduction of general and administrative costs.

Liquidity

Consolidated Cash as of June 30, 2005, was $568,000 compared to $1,000 at the end of 2004. The Company expects that its current cash flow position will enable it to adequately fund all of its operational and debt service requirements. Prior to end of the second quarter, the Company reimbursed Golden Star for the short-term funding provided to meet its operating expenses following the financial reorganisation in 2004.

French Guiana and Exploration

Golden Star continues to perform evaluation activities on the Company's properties in French Guiana, in accordance with their Option Agreement with the Company. Certain limited production of gold has continued under a lease arrangement providing for royalty payments to EURO. This has minimised the illegal operations that were being undertaken until recently on the Company's properties.

EURO Ressources S.A. is a French company presently focused on acquiring and holding mineral royalties on operating gold mines. Additionally, the Company continues to hold certain exploration and development mineral rights, principally gold, in French Guiana, which are the subject of joint venture arrangements. The Company has approximately 45 million shares outstanding.

Statements Regarding Forward-Looking Information: Some statements contained in this news release are forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Such statements include comments regarding the intentions of the Company to acquire additional royalty or mineral interests, estimates of mineral reserves made by Cambior Inc. in respect of the Gross Rosebel mine and Cambior's anticipated production levels from that mine. There can be no assurance that future developments affecting the Company will be those anticipated by management.

Additional information relating to EURO Ressources S.A. is available on SEDAR at www.sedar.com. Further requests for information should be addressed to:



James H. Dunnett Allan J. Marter
Directeur-General President
Tel: +1-604-710-2242 Tel: +1-303-894-4631
Fax: +1-604-608-3283
Email: jhdunnett@aol.com



Contact Information

  • EURO Ressources S.A.
    James H. Dunnett, 604-710-2242
    Directeur-General
    604-608-3283 (FAX)
    email: jhdunnett@aol.com
    or
    Allan J. Marter, 303-894-4631
    President